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Is the Tesla and SolarCity Offer a Good Idea?

Elon Musk, the chairman of Tesla Motors, recently announced intentions to combine solar installer SolarCity with his electric vehicle company Tesla and his new lithium ion battery company.

As a result, according to a statement from Musk, “We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers.”

While Musk appears confident about the deal, some analysts are unsure of the value it would deliver. In an article for Platt’s Megawatt Daily, William Tokash, senior research analyst with Navigant Research, chimed in on some of the potential complications.

“It will likely be a challenge for them to explain these separate businesses to their investors and manage their investor’s expectations,” Tokash says. “One could argue that Tesla might be better off focusing 100% of their effort on building out their Model 3 and Nevada Gigaplant battery manufacturing capacities in the short run.”

Nevertheless, if the deal does go through, Tokash says some of the possibilities would be intriguing.

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